Apartment rents decline in Dubai and Abu Dhabi in Q3

Average apartment rents in both Dubai and Abu Dhabi were hit by minor declines in the third quarter, according to the latest UAE market report from listings site Bayut.com.

The firm said there was an overall decline in values on average across Dubai in Q3, despite improvements in some areas.

“There was a clear slowdown in the drop in rental values in Dubai, which could be attributed to the market slowly recovering from the bigger drops in previous months,” the company said.

The average rent in the emirate declined 2 per cent from Dhs128,000 in Q2 to Dhs125,000 in Q3. The average yield stood at 5.5 per cent.

Apartment prices were down 3.8 per cent quarter-to-quarter on average, the firm said.

By apartment size, studio rents declined 2 per cent during the quarter to average Dhs55,000 from Dhs56,000.

One-bed rents declined 8 per cent to Dhs92,000 to Dhs100,000, while two-beds and three-beds declined 1 per cent to average Dhs144,000 and Dhs200,000 respectively.

Four-bed rents also declined 1 per cent to Dhs302,000.

“The correction in rents could also be a result of a consistently growing set of tenants now looking to become homeowners by opting for numerous rent-to-own offerings by several developers, a phenomenon that has had an obvious effect on the rental segment of the market,” Bayut said.

Bayut’s top locations for renting apartments in Dubai (Q3 2016
1. Dubai Marina
2. Jumeirah Lakes Towers (JLT)
3. Bur Dubai
4. Downtown Dubai
5. Dubai Silicon Oasis
Bayut’s top locations for buying apartments in Dubai (Q3 2016)
1. Dubai Marina
2. Jumeirah Lakes Towers (JLT)
3. Downtown Dubai

Abu Dhabi

In neighbouring Abu Dhabi, apartments rents declined 4 per cent from Q2 to the end of Q3 with rental yields averaging 7 per cent.

However, apartment sales prices increased by 2.2 per cent on average during the period.

By apartment size, studio rents were down 6 per cent to average Dhs56,000. One-beds were down 6 per cent to average 90,000.

Two-bed rents decreased 1 per cent to Dhs133,000 and three-bed rents were down 6 per cent to Dhs170,000.

In contrast, four-bed rents increased 1 per cent averaging Dhs242,000.

“Although the falling rents have made accommodation in the emirate more affordable, the strength of rental yields mean the units offer an equally lucrative proposition to investors,” Bayut said.

“The capital’s strong economy is keeping the realty sector buoyed, while growing opportunities for work make for a healthy rise in population, which in turn keeps the market going.”